Sunday, April 13, 2014

Stock Market Corrections Historical Data

* Since the end of World War II (1945), there have been 27 corrections of 10% or more, versus only 12 full-blown bear markets (with losses of 20% +).

* This equates to one correction roughly every 20 months, according to Dow Jones index maven John Prestbo, who points out that this average does not mean they’re evenly spaced out. 25% of these corrections over the last 66 years occurred during the 1970′s (the Golden Age of Market Timers), another 20% occurred during the secular bear market of 2000-2010.

* The average decline during these 27 episodes has been 13.3% and they’ve taken an average of 71 days to play out (just over three months).

* From the beginning of the last secular bull market in 1982 through the 1987 crash, there was just one correction of 10% or more. Between the Crash of 1987 and the secular bull market’s peak in March 2000, there were just two corrections, according to Ed Yardeni. This means that secular bull markets can run for a long time without a lot of drama.

* Since the stock market’s bottom in March of 2009, there have been only 3 corrections: In the spring of 2010 the S&P 500 began a 69-day drop of roughly 16%. The widely referenced summer correction of 2011 lasted for about 154 days and almost became a bear market. The correction during the spring of 2012 set up one of the greatest rallies of all time, although it was barely a real correction, sporting a peak-to-trough drop of just 9.9% in just under 60 days.

* The most recent correction took place in 2011, between the end of April into the end of September. The Dow dropped roughly 16%. The S&P 500 actually dropped a hair over 20% before snapping back, leading some to believe that this was a bear market – the implication being that the current bull market is just 2 years old and not five years old (dating from March of 2009). I have no strong opinion on that debate.

* Bull market rallies in between corrections – and there have been 58 in the post-war period – tend to run for an average of 221 trading days before being interrupted and gaining an average of 32%. By this standard, we are way overdue for a correction (but in fairness, we have been for awhile).

* As to what we should do during corrections, I’d recommend maintaining a list of high-quality stocks you’ve been kicking yourself for missing out on and clearing the decks of any longs you don’t truly love. For those with time horizons longer than five years (most), the best thing to do is grit one’s teeth and do very little. If a correction of between 10 and 20% is unbearable to you mentally or financially, that means you’ve  either got more money than you should invested in stocks or you’re kind of a fairy. Make the adjustment you can live with and remember this feeling the next time you find yourself chasing the market.

* As to the question of whether a correction could become a bear market (or worse even, a crash), the answer is that this is always possible. But most corrections do not become crashes, and every single one of them turned out to have been great buying opportunities in the fullness of time.


Joshua M Brown

Sunday, April 6, 2014

The stress of being a trade....how to cope.

Coping With Trading Stress

Trading is a marathon not a sprint. Often time’s new traders allow one bad day to alter not only their trading styles, but their emotions as well. In order to be a successful trader you have to learn to put tough trading days in their place. Do you think every game Michael Jordan lost; he then went home and changed his entire style of play. When Tiger Woods has an off day, do you think he immediately calls his swing coach to develop a new swing strategy?

Set Daily Limits

Have a maximum amount of money you are willing to risk per day as a part of your day trading activities. Base this number on your comfort level. If in the unfortunate event this number is hit, immediately stop trading. You can always get it back on another day. For example, let’s say you are comfortable risking $500 per day. But, then you break this rule and end up losing $1,500. How do you think this will make you feel? Set a number you can live with and forget about everything else.


Saturday, March 22, 2014

MNGA trading lesson

Text book flag break Friday at 2 spot. Issue was heavily shorted off SA story and recent positive pr wire. The volume Friday was the key catalyst a short cover was a high probability into close. Trading idea was alerted 1.95 right before the key break.




Thursday, March 20, 2014

Tuesday, March 11, 2014

OXGN idea today 2.35 trading 5.80 after hours

OXiGENE Announces Positive Topline Results From Randomized Phase 2 Study GOG186I of ZYBRESTAT(R) in Combination With Avastin(R) for Recurrent Ovarian Cancer

http://pics.newsware.com/gc.asp?nm=166404&dt=12854&ky=01C99ae-nqOn6 

 

Sunday, February 23, 2014

WatchList

AEZS tight on trendline need patience http://elite.finviz.com/quote.ashx?t=aez...
BGMD bullish if it stays above trend line and 50dma http://elite.finviz.com/quote.ashx?t=bgm...
BONE penny with a nice chart http://elite.finviz.com/quote.ashx?t=bon... 
CNDO tight consolidation on 50dma watch this closely for vol http://elite.finviz./quote.ashx?t=cnd... 
CTIC interesting if we get range break over resis http://elite.finviz.com/quote.ashx?t=cti... 
HPJ continue to watch for consolidation and break of trend line http://elite.finviz./quote.ashx?t=hpj... 
IVAN highlighted this on trend line has moved up continue to watch for sustained  move http://elite.finviz.com/quote.ashx?t=iva...

Thursday, February 20, 2014

StockTalk feedback

Feel free to fire away with your feedback. + or -

MNGA idea

Natural-gas futures at 5-year high this week. MagneGas Corp has strong support at 50dma with a macd cross close. Recent run over one has formed a nice base last few days as sellers appear gone. A break over .84-85 on watch.



Disclaimer: http://bmanmicrocaps.blogspot.com/p/disclaimer.html

Thursday, February 13, 2014

NEWL idea review

Fortunate today to spot the  NEWL financing news at .65 off the pr wire. Stock rallied over 40% and closed after hours at .93. My tweet hit the stream at .66 ask. If you would like to learn what pr wires move stocks join us in  StockTalk.

http://bit.ly/Trading-Ideas



Saturday, January 18, 2014

Why 90-95% of traders lose !!!!!!

    They risk too much to try to make so little.

    They trade with the probabilities against them.

    They think trading is easy money.

    Instead of focusing on learning how to trade they focus on getting rich.

    They blow up due to improper position sizing.

    With no understanding of the mathematical risk of ruin they are doomed after the first long
    string  of losing trades.

    They don’t do their homework.

    They trade opinions not robust systems.

Saturday, January 11, 2014

What traders are saying about StockTalk Chat quotes from Friday




trash757  great group of very hard working, highly motivated people. Great calls and discipline, fortunate to be part of it, learning every day

trash757 best chat out there right here, if you want to make money 


SnappyTeeth Have a great weekend everybody. And thanks for all the great ideas. To many. Great room 


Rorro Thx everyone. Lots of great ideas. Was hard to go through them all.


TheTradingCat There is some great talent in here...glad to be here 

Sandman: bman some amazing idea flow today... 13:47
Sandman: i can't even trade em all too many good ideas... 13:47
Sandman: room doing a great job


CHAT LINK:  http://bit.ly/TradingLessons